Is it worth saving money and letting your insurance company track your every move?

With insurance premiums seemingly on the rise, it’s no wonder that consumers are looking for ways to lower their rates. Most insurance companies offer some type of discount for safer driving, which is monitored by the insurance company.

That’s why we wanted to explore Mary’s question about the pros and cons of allowing your insurance company to track your driving in exchange for potentially lower premiums.

“State Farm… gave me a ‘tracker’ so they could offer discounts for safe drivers. Am I giving out too much information? I started filling out (information) on the app but stopped. They will give me driving tips/suggestions based on the tracker. What do you think about this type of tracker?” — Mary, St. Louis, MO

While most insurance companies offer some form of vehicle tracking to reward safe driving, most drivers wonder whether the benefits outweigh the potential privacy concerns.

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What are privacy devices in car insurance?

Although Progressive pioneered Drive and Save, Snapshot, in 1998, many insurance companies have followed suit. Instead of connecting a telematics device to collect driving data, insurance companies use OnStar and an app on drivers’ mobile devices.

With State Farm, you have the option of a Bluetooth transmitter paired with a mobile app or Drive Safe & Save Connected Cars. State Farm is phasing out OnStar for new enrollees.

It is important to remember that there is no single set of metrics that all insurance companies collect or use to determine what they consider safe driving. So, when considering what information is collected and how your driving will be evaluated, it is important to understand the specifics of your particular insurance company.

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What information is collected?

While each insurance company collects different data, some of the most common types of data collected include:

• Acceleration Factor
• Driving speed
• Braking speed
• Taking corners
• Distraction from the phone
• Total miles traveled

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How do usage-based insurance programs work?

Usage-based insurance (UBI) programs, also known as telematics or pay-to-drive insurance, have gained popularity among major insurers as a way to offer personalized premiums based on individual driver behavior. These programs typically work like this:

Registration: Drivers choose to join the program, usually in exchange for an initial discount.

Collecting data: Your insurance company provides a device that plugs into your car’s OBD-II port or a smartphone app that lets you track your driving.

Monitoring period: Your driving is monitored for a set period, usually 3–6 months.

Data analysis: The insurer analyses the collected data to assess your driving habits.

Bonus Adjustment: Based on the analysis, your premium may be adjusted. Safe drivers often see their rates reduced.

Different insurers offer different programs with unique features:

Drive Safe & Save by State Farm: Uses a mobile app with a Bluetooth transmitter or built-in telematics in selected vehicles.

Progressive Summary: One of the pioneers of UBI, offering both a plug-in device and a mobile app.

Drivewise by Allstate: Uses a mobile app to track driver driving style and offer rewards.

DriveEasy by Geico: A mobile app-based program that monitors driving habits.

RightTrack by Liberty Mutual: It offers a choice between a plug-in device and a mobile application.

It is important to note that while these programs can lead to significant savings for safe drivers, they can result in higher premiums for those who are considered higher risk. Additionally, availability and specific features may vary by state due to varying insurance regulations.

Before you sign up for any UBI scheme, read the terms and conditions carefully, paying particular attention to what data is collected, how it is used and how it may affect your contributions in the short and long term.

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What are the concerns?

It’s not just the type of information collected that’s a privacy issue. Many insurance companies have privacy policies that allow them to share your information with third parties. While State Farm says it won’t sell your Drive Safe & Save data, it does share some information with third parties.

Sharing Accident Assistance data for Drive Safe & Save is done with the driver’s consent and is intended to improve customer service. For example, if necessary, State Farm may share your vehicle’s location with a towing company and law enforcement if you are in a disabled vehicle. Additionally, if you are involved in a car accident, your insurance company may use your tracking data to help file a claim.

Your idea of ​​safe driving may not be the same as your insurance company’s. Some drivers have even seen their rates increase after using driving tracking programs. It’s not just your insurance company that can access your driving information. With State Farm, named policyholders can see all trips recorded on all devices over the past 30 days.

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What are the benefits?

While the specific amount of the discount varies by insurance company and driver, State Farm says, for example, that Drive Safe & Save enrollees can initially save 10% when they sign up for the program and then receive a discount of up to 30%.

It is important to note that the percentage you can save may be limited in some states, such as New York, where the discount is capped at 30%. This program is not available in states such as California, Massachusetts, and Rhode Island. If you don’t drive much and drive safely, this could be a way to reduce your insurance payments. By recording your driving safety data, it can be a great learning tool to accurately assess your driving habits.

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Kurt’s Key Takeaways

Mary was right to pause to consider the benefits and potential pitfalls of allowing your insurance company to track your driving. It’s important to weigh potential benefits, such as possible discounts, against these privacy concerns. If you’re uncomfortable or concerned about the data being collected and how it’s being used, your insurance company’s program may not be right for you. If you already use a tracker and feel uncomfortable, contact your insurer for guidance on how to remove the feature or the app and its associated data.

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Remember that it is always important to read and understand the terms and conditions before using any app, especially those that collect personal data. It is your data and you have the right to know how it is used.

Are you part of an insurance tracking program? Do you think the benefits outweigh the privacy concerns? Let us know by writing to us at Cyberguy.com/Contact

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